ZTE replaces executive amid China-US talks

ZTE, the Chinese telecoms company that has become a focal point of the nation’s trade dispute with the US, has replaced one of its most powerful executives in a move that may signal efforts to placate American demands.

Nonexecutive director Tian Dongfang has already assumed the role of party secretary with the ruling communist party, people familiar with the matter said, asking not to be named talking about internal decisions.

China is trying to convince the US to lift a seven-year ban on ZTE’s purchases of vital American technology, imposed in April for breaching terms of a settlement over sanctionbreaking sales to Iran.

President Donald Trump has said the US will allow ZTE to resume business if it pays a $1.3bn fine and changes its management and board. It is unclear, however, if Tian’s appointment is intended to appease Washington, where opinions are divided on whether to let ZTE off the hook.

The dispute is now entangled in a trade dispute between the world’s two largest economies. The moratorium has all but mothballed China’s secondlargest telecoms equipment maker because it depends on US components — such as Qualcomm chips — to build its smartphones and networking equipment. A spokeswoman for ZTE did not respond to repeated calls or messages seeking comment.

Several US politicians have agitated to keep the ban in place, fearful of China’s growing prowess and in retaliation for what they call years of technology theft. Chinese government officials are now undertaking negotiations on behalf of ZTE. The company, which does not have much influence in the process, will have to accept the terms of any settlement reached between China and the US.

Shenzhen-based ZTE is already hurting and is said to be estimating losses of at least 20billion yuan ($3.1bn) as clients pull out of deals and expenses mount. But the company is hopeful of striking a deal soon and already has a plan in place to swing idled factories into action within hours of the suspension being lifted.

ZTE IS ALREADY HURTING AND IS SAID TO BE ESTIMATING LOSSES OF AT LEAST 20-BILLION YUAN AS CLIENTS PULL OUT